State, feds OK Pen Bay-MaineHealth merger

ROCKLAND , Maine— Pen Bay Healthcare of Rockland is poised to become a full member of Maine’s largest health care system, MaineHealth, the corporate parent of Maine Medical Center in Portland. Pen Bay announced late Tuesday afternoon that state and federal regulatory agencies have cleared the merger, paving the way for final approval by PenBay corporators at a meeting Nov. 15.
Pen Bay Healthcare members include the 109-bed Penobscot Bay Medical Center as well as Pen Bay Physicians and Associates, Kno-Wal-Lin Home Care and Hospice, Quarry Hill Retirement Community and the Knox Center for Long Term Care. The merger has been in progress since 2008, when Pen Bay became a strategic affiliate of the larger system.
Pen Bay Healthcare CEO Roy Hitchings said Wednesday that the organization will retain its local board of directors and continue to reflect the health care priorities of the midcoast communities it serves.
“I would say that 95 percent of the decisions that have been made by our local board will still be made by the local board,” he said. Some measures will require ratification by the MaineHealth board, including annual budgets, long-term planning and marketing, and the hiring of future CEOs, he said.
Hitchings said Pen Bay leaders considered approaching both Brewer-based Eastern Maine Healthcare Systems and Lewiston-based Central Maine Healthcare before settling on MaineHealth as the best partner.
The merger does not mean that Pen Bay patients who need more specialized care will be transferred only to Maine Medical Center or other MaineHealth member organizations, Hitchings said.
“Patient referrals will continue to be based solely on clinical needs and patient preference,” he said. Historically, he said, midcoast residents who need specialized care have elected to seek services in Portland, and many members of the clinical staff maintain professional connections in southern Maine.
Partnership dues will cost an estimated $675,000 per year. Benefits of the merger will include cost savings related to centralized planning, marketing, purchasing and clinical support, Hitchings said, as well as more affordable access to the electronic medical records system in use by MaineHealth members. Pen Bay expects to save at least $1 million over the first three years of membership, which will take effect Jan. 1, 2011, he said.
Longer term, membership in the larger organization will promote the kind of clinical collaboration and administrative efficiencies needed to help curb the rising cost of health care and promote better clinical outcomes, Hitchings said.
“This country is about to undergo, and needs to undergo, some fundamental changes in the way health care is delivered,” said Hitchings. Regional health care systems like MaineHealth, Eastern Maine Healthcare Systems and Central Maine Healthcare are the key to greater collaboration, improved clinical care and streamlined costs, he said.
The merger has garnered the regulatory approval of the certificate of need office in the Maine Department of Health and Human Services, which is charged with determining the overall benefit to Maine consumers, as well as the Federal Trade Commission, which safeguards industry competition.
MaineHealth is the corporate parent of the Maine Medical Center in Portland, Spring Harbor Hospital in Westbrook, Waldo County General Hospital in Belfast, Stephens Memorial Hospital in Norway and a number of other health care organizations. Strategic affiliates include Maine General Medical Center in Augusta and Waterville and St. Mary’s Regional Medical Center in Lewiston.